Malloy v. Watchtower Bible and Tract Society

Filing 31

ORDER Granting Defendant's Motion to Set Aside Default 21 and Denying as Moot Plaintiff's Motion and Amended Motions for Default Judgment 18 & 19 . Signed by District Judge Denise Page Hood. (LSau)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
LINDA D. MALLOY,
Plaintiff,
Case No. 17-10635
v.
HON. DENISE PAGE HOOD
WATCHTOWER BIBLE
AND TRACT SOCIETY,
Defendant.
_______________________________________/
ORDER GRANTING DEFENDANT’S MOTION TO
SET ASIDE DEFAULT [Dkt. No. 21] and DENYING AS MOOT
PLAINTIFF’S MOTION AND AMENDED MOTIONS FOR
DEFAULT JUDGMENT [Dkt. No. 18 and 19]
I.

INTRODUCTION
Pro se Plaintiff filed this cause of action on February 28, 2017. On May 2,

2017, Plaintiff filed an Amended Complaint. On May 26, 2017, the Clerk of the Court
filed a Clerk’s Entry of Default against Defendant for failing to plead or otherwise
defend this cause of action – with respect to the original Complaint. Dkt. No. 12. On
the same day, the Clerk of the Court denied Plaintiff’s request for entry of default
judgment because there was no sum certain requested. Dkt. No. 13. On June 26 and
28, 2017, Plaintiff filed a Motion for Default Judgment and an Amended Motion for
Default Judgment, respectively. Dkt. Nos. 17 and 18.
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On August 1, 2017, Defendant filed a Motion to Set Aside Default Judgment
(the “Motion to Set Aside”). Dkt. No. 21. The Motion to Set Aside has been fully
briefed. On August 30, 2017, the Court held a hearing on the Motion to Set Aside and
the Motion for Default Judgment. For the reasons that follow, the Court grants the
Motion to Set Aside and denies as moot the Motion for Default Judgment.
II.

BACKGROUND
The Motion to Set Aside turns on whether Defendant was properly served.

Defendant is a religious corporation, organized and existing under the laws of the
State of New York.
III.

ANALYSIS

A.

Legal Standard
Pursuant to Federal Rules of Civil Procedure 55(c), an entry of default may be

set aside only upon the showing of: (1) mistake, inadvertence, or excusable neglect;
(2) newly discovered evidence; (3) fraud, misrepresentation or other misconduct of
the adverse party; (4) the judgment is void; (5) the judgment has been satisfied,
released, or discharged; or (6) any other reason justifying relief from judgment. See
also Burrell v. Henderson, 434 F.3d 826 (6th Cir. 2006); United Coin Meter Co. v.
Seaboard Coastline R.R., 705 F.2d 839 (6th Cir. 1983).
As set forth in United Coin, the Court also must determine that good cause
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exists for setting aside default judgment by assessing whether: (a) the plaintiff will be
prejudiced; (c) the defendant has a meritorious defense; and (c) culpable conduct of
the defendant led to the default. Id. at 845; Shepard Claims Serv., Inc. v. William
Darrah & Assocs., 796 F.2d 190, 194 (6th Cir. 1986). As the entry of default is a
harsh sanction, “[a]ny doubt should be resolved in favor of the petition to set aside the
judgment so that cases may be decided on their merits. United Coin, 705 F.2d at 846;
Shepard, 796 F.2d 193 (there is a strong preference for deciding cases on the merit
rather than by default).
B.

Analysis
“Without proper service of process, the district court is without jurisdiction to

make an entry of default against a defendant.” Sandoval v. Bluegrass Regional Mental
Health-Mental Retardation Board, 229 F.3d 1153, No. 99-5018, 2000WL 1257040,
at *5 (6th Cir. 2000) (TABLE) (citing 10 A. Wright, Miller & Kane, Federal Practice
and Procedure: Civil 3d § 2682); King v. Taylor, 694 F.3d 650, 655 (6th Cir. 2012)
(explaining that “without proper service of process, consent, waiver, or forfeiture, a
court may not exercise personal jurisdiction over a named defendant[,]” and “in the
absence of personal jurisdiction, a federal court is powerless to proceed to an
adjudication.” (internal quotation marks and citations omitted)); Etherly v. Rehabitat
Systems of Mich., No. 13-11360, 2013 WL 3946079 (E.D. Mich. July 31, 2013) (“if
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service of process was not proper, the court must set aside an entry of default.”). A
named defendant “becomes a party officially, and is required to take action in that
capacity, only upon [proper] service of a summons or other authority-asserting
measure stating the time within which the party served must appear and defend.”
Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S 344, 350 (1999).
The default should be set aside. First, only a non-party making personal service
can supply the court with a valid affidavit constituting proof of service. Rule 4(l).
Plaintiff, as a party to this cause of action, was not authorized to serve a summons and
Complaint. FRCP 4(c)(2).
Second, Plaintiff failed to properly serve the summons and Complaint on
Defendant (a corporation) pursuant to Rule 4(h), which requires personal service on
“an officer, a managing agent or general agent, or another agent authorized by
appointment or by law to receive service of process.” The rule does not provide for
service of process upon corporations by mail. O.J. Distributing, Inc. v. Hornel
Brewing Co., Inc., 340 F.2d 345, 354-55 (6th Cir. 2003) (having a receptionist sign
for an overnight package is not sufficient under Rules 4(b) and (h); Larsen v. Mayo
Med. Or., 218 F.3d 863, 868 (8th Cir. 2000). Etherly v. Rehabitat Systems of
Michigan, No. 13-11360, 2013 WL 3946079 (E.D. Mich. 2013) (improper service
where “someone at Rehabitat acknowledged receipt” of a certified mail package
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because “Rule 4(h)(1) does not authorize service of process by mail; it requires
mailing combined with personal service of the agent.”); Amnay v. Del Labs, 117 F.
Supp. 2d 283, 268-87 (E.D.N.Y.) (holding that Rule 4(h)(1) does not authorize service
on corporations by mail).
Third, Plaintiff did not serve Defendant in compliance with the state law of
Michigan or New York, even though FRCP 4(e)(1) permits service on an individual
by “following state law” i.e., the rules of either the state where the case is filed
(Michigan) or the state where service is made (New York).1 Both states require
physical delivery of the suit papers to an officer, managing or general agent, or other
agent authorized by law to receive service of process.2

1

Plaintiff must make service on Defendant (a corporation) in compliance
with Federal Rule of Civil Procedure 4, including Rule 4(h).
2

In New York, CPLR § 311 provides that service upon a domestic
corporation shall be made by serving an officer, director, managing or general
agent, or cashier or assistant cashier, or any other agent authorized by appointment
or by law to receive service. A not-for-profit corporation may also be served
pursuant to § 306 or 307 of the not-for-profit corporation law, which allows service
upon its registered agent or the New York Secretary of State. Plaintiff did not
satisfy any of those provisions.
Courts in the Eastern District of Michigan consistently have held that proper
service in Michigan does not include service by mail. See Harper v. ACS-Inc.,
No. 10-12112, 2010 WL 4366501, at *3 (E.D. Mich., Oct. 28, 2010); Walker v.
Brooke Corp., No. 08-14574, 2009 WL 1689653, at *1 (E.D. Mich., June 17,
2009); Mosley v. Faurecia Auto. Seating, Inc., No. 08-10130, 2008 WL
1925051 (E.D. Mich., May 1, 2008); and State Farm Fire & Cas. Co. v. Hamilton
Beach/Proctor Silex, Inc., No. 05-74700, 2007 WL 127909 (E.D. Mich., Jan. 11,
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Fourth, in her Motion papers, Plaintiff advised the Court that she “served” the
Complaint in New York by having “UPS” deliver the original summons and
complaint on March 23, 2017 and the amended complaint on April 24, 2017 to
someone located at a “dock” at 90 Sands Street, Brooklyn, New York. See Dkt. No.
10, at Pg ID 1198, 1200-01. She identified that person only as “Angel.” Id. Plaintiff
contends that “Angel” is legally authorized by Defendant to accept process, but
Defendant has no authorized agent named “Angel” or any resident at 90 Sands Street
with that name. Dkt. No. 21, Ex. A at ¶¶ 19, 20.
Having found that Plaintiff did not properly serve Defendant, the Court
concludes that it does not have the authority to enter a default or judgment against
Defendant. As the Sixth Circuit has held, “without proper service of process, consent,
waiver, or forfeiture, a court may not exercise personal jurisdiction over a named
defendant.” Wells v. Rhodes, 592 F. App’x 373, 377 (6th Cir. 2014) (quoting King v.
Taylor, 694 F.3d 650, 655 (6th Cir. 2012)). As recently stated by another judge in
Eastern District of Michigan:
When evaluating either a motion to set aside a proper entry of default or
a default judgment, the court considers three factors: 1) whether the
default was the result of the defendant’s willful or culpable conduct; 2)
whether the plaintiff would be prejudiced if the default is set aside; and

2007).
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3) whether the defendant asserts any meritorious defenses to the claims.
United Coin Meter Co., Inc. v. Seaboard Coastline R.R., 705 F.2d 839,
844-45 (6th Cir. 1989).
“However, these three factors only require consideration when service
of process is properly effected because without proper service the court
has no jurisdiction to take any action over the defendant, including
entering a default.” Adams v. Wilmington Finance/AIG, 2012 U.S. Dist.
LEXIS 98525, 2012 WL 2905918 at * 1 (E.D. Mich. 2012). “In other
words, until a party has been properly served, the Court cannot take
action against that party, including entering a default or judgment by
default against that party.” Harper v. ACS-INC., 2010 U.S. Dist. LEXIS
114760, 2010 WL 4366501 at * 3 (E.D. Mich. 2010). Accordingly, “if
service of process was not proper, the court must set aside an entry of
default.” O.J. Dist., Inc. v. Hornell Brewing Co., Inc., 340 F.3d 345, 353
(6th Cir. 2003).
Green v. City of Southfield, No. 15-13479, 2016 U.S. Dist. LEXIS 208936, at **5-6
(E.D. Mich. Feb. 22, 2016) (Cox, J.).
In United States v. Plesco, No. 97-74042, 2012 U.S. Dist. LEXIS 71005, at *2
(E.D. Mich. May 22, 2012), the court adopted a report and recommendation (“R&R”)
to vacate a default judgment for improper service of process, explaining that “the
R&R accurately articulates the law and presents a well-reasoned, persuasive analysis
of the application of governing law to the facts of this case.” As stated in the R&R:
As an initial matter, “if service was improper, the default judgment is
void and must be vacated” pursuant to Fed. R. Civ. P. 60(b)(4). United
States v. Murphy, No. 99-1436, 2007 U.S. Dist. LEXIS 78020, at *5
(E.D.N.Y. Sept. 28, 2007). Indeed,
The Sixth Circuit requires that a court set aside a default judgment
if service of process was not proper. See Jalapeno Prop. Mgmt.,
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L.L.C. v. Dukas, 265 F.3d 506, 515 (6th Cir. 2001) (stating that “if
the underlying judgment is void, it is a per se abuse of discretion
for a court to deny a movant’s motion to vacate the judgment
under Rule 60(b)(4)”) (internal citations omitted) (emphasis in the
original). Therefore, if service of process is not proper, the
judgment is void, and the court must set aside Defendant’s default
judgment. See United Student Aid Funds, Inc. v. Espinosa, 130
S.Ct. 1367, 1376-77, 176 L.Ed.2d 158 (2010).
Plesco, 2012 U.S. Dist. LEXIS 71020, at *11-12 (collecting multiple Sixth Circuit and
United States District Court cases within the Sixth Circuit holding the same).
Although Plesco involved a default judgment, the same rationale applies with respect
to an entry of default.
For all of the reasons stated above, the Court holds that Plaintiff failed to
properly serve Defendant. The Court grants Defendant’s Motion to Set Aside Default
Judgment.
IV.

CONCLUSION
Accordingly,
IT IS ORDERED that Defendant’s Motion to Set Aside Default Judgment [Dkt.

No. 21] is GRANTED.
IT IS FURTHER ORDERED that the Clerk of the Court shall VACATE the
Clerk’s Entry of Default [Dkt. No. 12].
IT IS FURTHER ORDERED that Plaintiff’s Motion for Default Judgment and
Amended Motion for Default Judgment [Dkt. Nos. 17 and 18] are DENIED AS
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MOOT.
IT IS FURTHER ORDERED that, within seven (7) days of the date of this
Order, Defendant’s counsel shall file with the Court the name and address of an agent
of Defendant upon whom Plaintiff can properly serve Defendant.
IT IS ORDERED.

S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: August 30, 2017
I hereby certify that a copy of the foregoing document was served upon counsel of record on
August 30, 2017, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
Case Manager

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